Marks & Spencer (M&S) recently unveiled the opening of a new staff academy, created with the intention of upskilling their employees. The academy was formed to bridge a skills gap within the business and to encourage staff learning – even at board level.

According to the Financial Times, M&S is expecting to train more than 1000 employees within 18 months to make staff more digitally advanced. Not only will employees be given extensive training, but will also receive a qualification in data analytics.

Traditionally, organisations have been more inclined to hire new staff to tackle the lack of skillset in an area. M&S, however, plans to encourage a data skilled workforce that will span the organisation. This move represents a real commitment to employee learning and a unique way to use the Apprenticeship levy, which will fund the training.

Speaking exclusively to HRD Connect, Jason Moss, CEO of Arch Apprentices, a training provider that supports businesses, governments and charities to create a cost-effective and capable workforce, commented: “The levy is vital for individuals, for their employers and for the economy as a whole.”

Although it seems some companies like M&S have created an innovative way to use the levy, not all organisations are following suit.

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Announced by the government in 2015, and actioned in May 2017, the levy was designed to help fund staff training and encourage the employment of apprentices. It also endeavoured to help employers by enriching the knowledge of existing staff. The levy is funded by the highest earning organisations and gives existing staff the opportunity to train as an apprentice.

According to a report by the Department for Education, the levy was created with the intention of improving the country’s skills system; the government’s productivity plan felt there was a gap between the UK and advanced economies.

The report also recognised the decline in investment into training by organisations. Before the levy was created, there were certain organisational fears that they would invest into their existing staff through training and development – but other companies would reap the benefit should that employee decide to leave. The levy, however, aimed to alleviate those fears.

M&S has used the scheme to provide a unique method of training to develop its team to be data sufficient; however, some organisations are not reaping the potential benefits of this levy and seeing it as another organisational tax.

Why is the Apprenticeship levy still underused?

A lack of knowledge on the levy is proving to be a challenge. Skills shortage led to the creation of the Apprenticeship levy and despite the name, it can be used across the organisation for all staff.

The government has pledged to create three million apprenticeships by 2020. Six months after the Apprenticeship levy was introduced, the British Chambers of Commerce found that 23% of levy-paying firms had no understanding of the levy or how their organisation will respond. Any funds in an organisation’s levy account will be removed after 2 years, thus the importance of fully using the money.

Seamus Nevin, head of policy research, Institute of Directors, told the Financial times back in September that the lack of information, mixed messages from the government, and rushed implementation before the levy was introduced, had created employer confusion.

Jason Moss of Arch Apprentices told HRD Connect: “Currently around just 10% of available levy funds have been spent – just 10%! We can identify two major reasons for this. Of course, there is a lack of understanding of the levy and what this means for businesses, but there is also a lack of understanding of why an apprenticeship is such a good delivery model of training that really works, and sticks.

“This means that CEOs, FDs, HRDs, and L&D leads are every month, missing out on training that could be really valuable for their organisations.”

In recent years, young workers have had higher expectations when it comes to the training they will be offered within their roles. Some prospective employees often consider the training opportunities as a reason to apply for a job. Under-using the levy can not only be detrimental to workforce enrichment, but also to staff retention and during the hiring process.

Apprenticeship levies are still under-used and forecast to miss government targets

A CIPD report found that almost half of organisations report that they will simply re-package current training schemes into apprenticeships to get the funding. This tactic will be detrimental to employee training, and arguably these methods are being enacted owing to a lack of employer understanding.

From the same report, CIPD also conducted a series of case studies on how best to use this initiative. One suggestion the report made was for employers to ‘keep an eye on emerging trends so you can future-proof the programme’.

This area is one in which M&S has been successful. Not only is it upskilling staff by creating its own academy in an unique way, but it has also recognised a skills shortage in the organisation. M&S understood that data science knowledge was lacking, and has created the academy to remedy that problem.

“Apprenticeships are different from other ways of training people: they insist on a blend of off-the-job training with on-the-job training and provide the structure within which the employee can deliberately practice what they do and accelerate the pace of their progress – all with the full support of their employer,” said Moss.

An interesting stipulation of the levy is that groups of companies can collect their available funds and merge them. This could represent the opportunity for organisations to collate their funds and offer an innovative way to train staff in a similar manner to M&S.

When we asked Moss whether he believed the government pledge to create three million apprenticeships by 2020 was attainable, he commented: “Maybe. Our experience has been that once an employer has seriously planned how to use their levy, then things start to move quickly.

“We know that lots of employers only started planning about a year ago and some are just beginning. However, outside of the levy, a lack of government budget for ‘non-levy’ employers could be the difference between the target being met and missed.”